Q2 2020 Earnings Call
[music].
Good day, ladies and gentlemen, and welcome to the next one you eat peak in Q2 Twentytwenty evenings call.
All participants will be in listen only mode, they will be an opportunity.
Can lead to getting the on site.
If you shouldn't need assistance during the cold P. signal and operated by pressing star things Yeah.
Keith note.
<unk> is being recorded.
I would now like turn the conference.
So.
Please go ahead so.
Thank you Claudia.
Welcome to.
Second quarter Twentytwenty, earning school.
With me today is our CEO.
And our CFO Alex Smith.
A press release is available on our Investor Relations website, <unk> Dot net one dot com.
As a reminder, during this call we will be making forward looking statements and I.
Q to look at the cautionary language contained in our press release regarding the risks and uncertainties associated with forward looking statements.
In addition, during the school, we will be using certain non-GAAP financial measures and we have provided a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures.
We will discuss that results in South African Rand, which is a non-GAAP measure.
We analyze our risk.
[music].
Ladies and gentlemen, if he could piece older main online you have lost the main because we are trying to be kidney if he confuse you mean online.
Sorry, everybody, we had a degree technical pitch.
Thank you do have been good age everybody again [noise].
We have talked you need to execute towards our strategy and corporate actions outlined on our fourth quarter 2019 lending school [noise].
I would like to focus today.
Discussion on L three strategic areas.
Namely South Africa, Europe and Africa as.
As one of the progress of our various corporate actions and related to that [noise].
Well kept that allocation.
Hi, lots of out Q2 switching between see results impute.
We reported revenue of.
$74 million, which was down 2% in constant currency.
We reported adjusted EBITDA negative zero point $7 million, primarily due to the lack of stuff goes in South Africa, and higher losses in IP G. As a result of delays of new product launches.
He be accounts remainder into.
At least stable at 1.4 million and then related financial services.
Okay. It's made EBITDA margin remained stable at 22%.
And we sold out payroll processing business first full $12 million in December 2019, and more recently announced a set of kind of snakes.
Well, it's $257 million ingenue repeat between V.
We had previously outlined four key objective supposed to be between D.
But having now completed the sale of case, Nate we will focus on the three remaining objectives for the rest of the yes.
The first objective for fiscal 2000 twinkie well.
The transition about South African businesses to a beat you see model.
Our dog it was to grow active account base and all that book by at least feels the same from the 1.1 million customer level, we had in Q4 29 team.
[noise], let's see I anticipate the availability of liquidity in Q4, we now expect add onto the.
20000 accounts and increase the loan book [noise].
I'd be city proceeds by the end of Q4 Twentytwenty.
The benefits of which will be visible in the first off of fiscal 2021.
Our distribution technology years of experience and affordable financial and value added services offerings.
All the key differentiators in the markets and play a critical role in driving a congrats.
Our current loan book has been steady around $24 million for the past few quarters, which is down from its peak of $80 million two years ago.
We intend to inject meaningfully liquidity into this business during Q4 2020.
Which we believe will drive higher growth in financial services account growth and fee income, adding to understood now South African operations to being a meaningfully profitable as cash generative business.
We expect the E bay's to naturally should over time and you look out goes to be driven by the sudden bond offerings.
He'd be accounts for approximately 1.04 million and continue to observe natural attrition in line with our expectations.
As we noted we are well underway with the transition about South African business to a beat you see model.
We have largely completed all the technical product and marketing developments, we required to scale this business.
Yeah.
They can afford US 2020, we can mainstay soft launch, although Newfoundland Becky offerings and without any investment in marketing and in a limited number of launches.
Outside of 13000, new accounts over the holiday period.
Reported we also introduced a new vehicle that's brought up to the market, which allow stonepeak fixable.
He was impressive limits regarding the amount that repayment period.
We have seen good demand for these products and during Q2, we should more than 60000 built these lutz.
During the quarter fed about also launched a new probably 11 product, where we provide the technical operational and distribution support interested for a commission.
These loans have two points of differentiation compared to our traditional business first the bank the boys its own capital and second the customers all high income in his than our traditional customer base.
We can see you need to see volume increases you know ATM infrastructure and into true, but do you need to the rollout of.
He was in the country and installed 73, new machines, bringing out there because the place they used to 1400 and city.
Easy pay continued to gain market share both with retailers in Dallas, winning a number of mandates during Q2 and grew 7% compared to a year ago.
We also made significant strides you know or indeed do.
Build a cloud based <unk> issuing and acquiring system that can significantly accelerate time to market for any new issuing banks anyway in the world.
I was thinking objective for 2020 used to introduce and scale, our new payment script, though and block trade offerings in Europe.
Oh, no first quarter two.
We need to an evening school I outlined our European strategy with bank Frick, and I'd be gene detail.
And therefore, we're not going to do that again today.
We expect to launch the first of its gone to brand new crypto indulgent products, along with a new brand as well as I'd be g.'s, new issuing and acquiring products in the stick.
<unk> for fiscal 2020 <unk>.
Many of these products are rolled out that's cooperation with bank Frick.
In order to accelerate started to markets. We've also begun discussions with additional financial institutions across Europe.
And we are optimistic one or more of these initiatives will be fruits.
As our European.
Product scale, we expect IP GE revenues to grow into and reducing losses, and then becoming accretive to the group.
You know so between the 19th we exercised the option to acquire an additional 55% interest in bank Frick.
The transaction is subject to approval from the least inside financial market, a 30 and.
Yes, it closed in April two in between.
Outside of the option exercise, we do not anticipate any material investments required for our European strategy.
Other than in business development in sales resources.
Most of the investments needed to create I'd be GE and its products have already been incurred.
And.
Over the past two years.
These are thought to that it's on side what are the IP G.'s no same thing in Malta on November 29 to the 19 and then they gave US positive feedback instantly. They gave to provide an official clearance we are dependent on visa and the time frames to provide a conditional approval.
In order to commence with the fusco onboarding of new glass.
Lastly on India in fiscal 2019.
Mobikwik applied for direct membership with visa and became an associate member in Q4 29 team.
You know between the 19, the reserve bank of India approved applications by Mobikwik.
Visa to launch taught programs with Mobikwik as the issue as.
We're currently working with maybe a quick to relaunch our virtual card offering on a much larger scale across the qualified customer base, which as he makes a sustained million users.
Mobikwik itself has performed ahead of expectations, primarily due to its successful.
In addition to being a digital financial services provider.
In the quarter ending December 31 to any 19 Mobikwik recorded an order that annualized revenue of $66 million up from $28 million in last year.
It has been contribution margin positive since October 2018, and cheap gas sheep.
Break even in the month of August 2019.
Digital financial services now accounts for approximately 25% Mobikwik struggled monthly revenue compared to zero during the previous fiscal year and it is currently disbursing in excess of I Didnt 10000, new loads per month.
Oh sensor.
Did you go objective for 22 any used to rapidly grow payment solutions sales in Africa.
We aim to accelerate market penetration in Africa through named Wow that group and carbon.
We expect that group to start generating revenue and into at least one other country outside of gone out during fiscal.
2020.
That group has largely completed all development. The best thing went for the first sliding Gardner.
And expect the commercial launch with one of the largest banks in the country before the end of Q3 2020.
Additional signed customers I expect it to be rolled out over the remainder of calendar twentytwenty.
Meanwhile, Zack.
Group has also made meaningful progress with potential customers to expanding Nigeria Africa's most populous country.
In addition to the progress they have made.
We also particularly pleased with the sales leads for they'd want products they have begun to generate.
Carbon continues to report exponential sequential growth across all the key.
Okay does have its business number of epic installations unique customers loves this business and number of value added transactions.
No new products and services that'd be launched including an essay me financing pencil and the health gay financing platform for the treatment of malaria.
Carbons main business unit, the Nigeria, one five.
We also reported another full year net profit for its your ended December 31 2090.
Carbons continued growth will be driven by its ability to excess capital Endo funding in order to meet the demands for its suite of products.
Let me now spend a few minutes on the progress we have made on the corporate actions we.
Outlined at the start of the fiscal year.
First scale snakes.
On January 23, 2020, we signed an agreement with Bailey said Stoneridge capital for the sale of case made for total proceeds of $237 million.
In addition to the above we also took out a $10 million dividend in early January.
Therefore that that'll proceeds broadly is the $257 million.
10 million dollar dividend, let's get the method of adjustments, including Cashing Korea, resulting in net proceeds of $217 million.
Second on D. and I.
We have already sold out a stake in DNA from 55.
The same to do 30% and the option we have granted to sell the remaining city, but stayed for approximately $59 million is that it until March the city first we need to any.
Operationally.
Did I has continued to grow in its cash generative.
It's also made good progress in raising the financing for its previously announced.
Acquisitions, which I expect it to close by June 2020, concurrently Theyve also been actively working on placing our she's the selic institutional investors. We therefore, but you need to believed that the and I will be in that position to call option.
Third on first in the same between 19, we sold out.
Payroll processing business first.
Approximately $12 million, we utilize the proceeds to stick to the portion of our long term borrowings, which at December 30, 129 team has left only $4 million outstanding in that facility.
Now that I have outlined the sources of liquidity I would like to focus on.
Capital allocation.
It is important to note that we ought an operating company I'm not an investment company and therefore it is imperative we are able to reinvest in our businesses to ensure they are able to reach sufficient scale, where they can generate sustainable profits and cash flow.
So first looking at investments in South Africa, we.
By investing $40 million to $50 million, primarily towards expanding our loan book back towards historical levels.
With an average duration of less than six months, we are able to turn the book over twice in a year, resulting in larger financial services revenue account growth and transaction fees and they for profitability and positive.
Cash flow.
Got it investments in Europe.
What about two primary focus areas, we anticipate spending approximately $50 million in Europe, primarily for the exercise about bad Creek option and food returning capital to shareholders. We will initiate a meaningful return of capital to shareholders in the form of a stock repurchase.
We will only be able to communicate the exact nature quantum and timing of the repurchase program. When we have received the proceeds from the asset disposals mentioned before.
Any preparation for this corporate activity, which is likely to commence in Q4.
Older finished I'll share repurchase authorization to $100 million this week.
Regarding the remaining legal matters with SASSA, both al claim and the counterclaim or at various stages within their respective schools.
To conclude we are excited with a new products markets. A business models, we have developed and look forward to focusing on execution rather than be tied up with legacy at nonproductive issues. We have enjoyed over the boss 18 months.
They have been now handed over to addicts to go over the financials.
Thank you haven't and good day to everybody.
I will discuss the key results and trends within our operating segments for the second quarter of fiscal 2020 compared to a year ago as well as compared to quarter, one twentytwenty a sequential.
And the more relevant today, given the changes in June, but the green over the past year.
For the second quarter 2020, or Abbvies ran dollar exchange rate was 14 ran 60 compared to 14 rent city to a year ago 14 rent 75 in the first quarter.
We recorded a fundamental loss per share.
10 cents this quarter.
Head to the 90 cents fundamental, especially a year ago.
Which includes into substantial impairment evolving books as whether the contribution can do you know.
This compares to a fundamental lost a shift in the first quarter two cents.
It's deterioration in performance against the previous quarter was mainly due.
To a reduction in Antelope revenues in the South African business.
Hi segments of African transaction processing reported revenue $20.4 million in the second quarter, 2020 down 6% compared with second quarter 29 team, but up <unk> percent from <unk> from the first quarter of 20.
20 on a constant currency basis.
Year over year decrease is primarily due to the termination of the SASSA contract.
Getting those with SASSA grin run codes and to a lesser extent the reduction in number you'd be accounts.
Decreases in revenue, resulting impact on operating income partially offset by higher.
Transaction revenue as a result in increased usage of our ideas.
Our operating margin for the second quarter 2020, and 29 team was negative 14.6 next and 53.8.
When compared to negative 17.4% in the first quarter 20 Tracy.
The improvement in the operating margin in the late this quarter is encouraging but we remain sub scale at this level of accounts and the focus is on lifting ready.
International transaction processing generated revenue of $34.4 million in the second quarter, 2020, which was down 10% compared to.
The second quarter, 29 team and flat compared to the first quarter 2020 in U.S. dollar terms.
The year over year decrease in revenue in the segment contributed equally by the Korean operations and IP G.
Segment operating margin improved 8.2% in the second quarter 2020.
Compared to the negative 10.6% year ago.
But down from the 11.1% recorded in the first quarter.
The second quarter 2020 case net revenue Korean won was down 1% year over year.
$33.5 million and consistent with the first quarter 2020.
<unk>.
EBITDA margins were the same at the same as though as a second quarter last year at around 22 cents [noise], that's slightly lower than what was the G.
[noise] case, that's cash conversion remain strong limited need for capital investment in what is now a relatively.
After like business.
The expected closing of the disposal transaction, we will start consolidating case net from March Twentytwenty.
[noise] inspected the transactions with just covering off some of the tax effects of the transaction.
We will be required to pay withholding taxes of approximately.
$90 million on closing the transaction.
You should be recoverable over a period of six to 12 months.
In addition, we have the U.S. tax liability arising from the disposal, which we currently estimate of between 15 and $21 million.
We would also incurred transaction related costs around.
$7 million in respect to the disposal.
Returning to operational performance I P. D legacy businesses continued to decline once we rolled out to our new products, we expect the business to return to growth and parents current loss.
I could you notice is also include approximately 100000.
Does that development costs in respect to the crypts asset storage product.
Incurred during Q2 on top of the $1.7 million invested prior to this quarter.
These development costs will start to reduce during fiscal 2020 ones, who know once the product.
Well, that's an inclusion and.
Applied technologies generated revenue of $22 million in the second quarter, 2020, which was up 15% compared with the same period last year.
27% lower compared to the first quarter 2020.
Increase in revenue over the prior fiscal year is primarily due to higher accounts the.
Come.
This will reduce over time and needs to be replaced new customer accounts.
I talk sales reduced from $8 million or the previous quarter to around $3 million, comprising anytime sales and higher than normal hardware sales.
In addition fee income reduced by.
$2 million against the previous quarter.
Nonrecurring see sources reduced.
Operating margin was a negative 4% compared to negative 142% in the same period last year.
5%.
In quarter 120 20.
The operating.
And in this business is heavily influenced by the revenue level as there is a significant fixed cost components. In this segment primarily related to the costs incurred to operate all financial services branch infrastructure.
Actually the accounts remain fairly steady through the first quarter.
And with a stable.
Based on lending in insurance businesses have also returned to more normalized operating performance levels.
A new Finbond sponsored products have grown over the last quarter.
And the acceleration of this growth is critical to the South African operations.
Our net loan book interest increased by about 25.
Turning around 7%.
And the phone rates remained in line with the historical levels seen price the loss of our customers last year.
On you variable line products are proving popular with the existing customer base I.
And we need to expand the take up of this product into new customers for the group.
A micro insurance policy holders of also remains largely flat and around 220000.
The last three quarters, and we are progressing initiatives to expand the distribution channels that was limited success to date.
Our corporate expenses in the second quarter 2020 was slightly higher than the first quarter.
And with a slightly higher than the current quarter last year due to higher advisor fees related to some of our strategic initiatives.
This is offset by lower acquired intangible asset amortization following the deconsolidation and do you know I.
And the fact that IP, Jean Claude intangible assets are now fully amortized.
We continue to assist the fair value of our investment in cell C zero value.
We do not see any like you have increasing their fair value until the recapitalizations being completed.
Well see itself is seeing some benefits from an increasing focus on the core operations.
What needs to complete the recapitalization to create sustainable.
Business.
We continue to provide support to the management team are working on providing access to our distribution network associates benefit.
We recognize income from equity accounted investments over half a million dollars during the second quarter 2020, and sent to a loss of $1.3 million in the.
Period last year.
And then that amount we saw a contribution of Quinn $4 million from 30% investment in denied.
A business that was consolidated in equipment period last year.
Thanks Fritz contribution listed in the quarter is near term profitability continues to be impacted by to invest them people.
Expand its operations.
We expect to see a stronger performance in the next fiscal year. Some of the investments start to deliver with it earnings were moved into the groups statement of operations once the exercise of the option exercise the option closes.
Been gone did not.
Tribute to earnings in the quarter is there any report earnings in our first and fourth quarters.
We expect the contribution from our equity accounted investment positive on annual basis.
As it is impacted by the timing of reported results by on various investments.
At December 31, too.
Doesn't 19, our unrestricted cash was approximately $50.7 million.
That's $46.1 million at the end of June.
Setting these amounts off against short term credit facilities.
$13.9 million $9.5 million, respectively means our net unrestricted cash increased.
Joining me from $36.6 million to $36.8 million.
However, this cash position was distorted by the early settlement in the January micro loan repayments of approximately $8 million, meaning the underlying cash balance was approximately $28.5 million.
The decrease.
And our cash balances.
In this quarter and we experienced in the last quarter as some investment in working capital reversed and largely reflects the impact to the current operating performance.
Adjusting for the long, but cash flows there was a $4 million outflows from operating activities, which includes.
And $2 million release from working capital.
Capital expenditures in the quarter of point $8 million was well below all the comparative periods.
It is now expected to change significantly going forward as capital expenditure largely limited to replace him.
We had short term.
Miscibility available to us in various territories of $32.2 million.
December 31 2019.
The team were $9 million of which in being utilized.
This excludes the facilities used to fund the ATM.
As of December 31, 2019, we had restricted cash of.
The $4.1 million and associated shorten facilities utilization of $84.4 million.
We haven't place short term credit facilities, a lot 1.45 billion Rand were $103.2 million.
Specifically to fund our ATM in South Africa and presented Castro.
These facilities and in the processing system as restricted cash on the balance sheet.
Any debt on the balance sheet 4.1 million dollar dollars relates to the funding of the CLC Air time purchase, which we expect me every second one so seems recapitalizations complete.
We're under the terms of.
In the right.
This is reduced from $14.5 million at the end of last quarter as the proceeds from the first disposal required to be used to coffee separately borrowings.
And as discussed the sale of our Korean operations were really significant capital into the business.
Which will allow us to settle.
Oh borrowings reinvest in our businesses and being stopped and liquidity as a last 12 months and return capital to shareholders.
A second quarter 2020 tax expense was $1.7 million compared to a tax benefit $4.4 million in Q2 2019.
Our effective tax rate continues to be impacted by the losses.
Bus and South African businesses has been affected me not recorded a deferred tax asset benefit.
And they tend to these net operating losses.
Our effective tax rate.
Therefore likely to continue to be distorted by the losses incurred.
Certain of our businesses.
Our weighted average share count has remained relatively constant and 56.6 million shares tree According to Twentytwenty.
Given the timing about various corporate actions and availability of liquidity as well as certain pending European regulators.
The approvals.
A number of moving parts in our business this year.
Using the same assumption of a constant currency base 14 ran 27 to the dollar we believe fiscal 2020 adjusted EBITDA.
Like seem to be a loss of approximately $3 million a decrease from our previous guidance of 16.
$10 million profit.
This decrease is primarily due to an 11 million dollar reduction related to foregone contributions as result of the sale of case net who first.
As well as an $8 million negative impact related to the delayed that liquidity injection in South Africa, she's the timing of our.
Yes, it realizations.
And I PGS inability to launches new products.
Due to the dependencies on visa certification.
A focus following the injection of liquidity during the fourth quarter 2020, we should drive new account growth in financial services in South Africa, and commence with <unk>.
Scaling up of anew initiatives in Europe.
Intern returning the grades to positive adjusted EBITDA position in fiscal 2021.
You can now open up the cool you are now.
Thank you if he would like to ask a question Keith pay Star then one.
You touched tencent well under keypad on your screen. If you decide to restore the question Keith peacetime then Q2 movies cells from the list again, ladies and gentlemen, if he would like to ask a question Keith <unk> Dawn then when we were poised to see if there any question.
We have a question from Scotch back of B. Riley. Please go ahead.
Yeah. Good morning, guys that I'm curious in the 2020, a adjusted EBITDA guide, whether or not there is any contribution from bank Frick in that a $3 million last number.
No there's no we haven't corporate.
Yes, it any anything for it contribution in that guidance.
Well well bring that in once the once the auction once the deal effectively classes.
Okay. So you will be consolidating results beginning in.
The the June quarter I guess.
Yeah, that's right so from a closed in April.
So from my problems yeah.
Okay perfect.
And then second can can you remind us of what returns it looked like historically in the core South African business. You know maybe when you were at that kind of 3 million Ah active account level.
[noise].
Just got a defense costs, which products and businesses you measure the total returns.
I guess, the easiest way for us to to outline the.
Revenues in the returns is to look at it on a per customer basis.
And so you know that the.
And average sort of revenue that we realized from.
So margin that we realized from our South African pessimism cardholders, and obviously, excluding the old binge on welfare distribution component of it so focusing on the provision of.
Well the bank account transactional services.
Loans insurance products et cetera Cross you know the the entire base.
Yeah, we would anticipate a probably around 25 to 50 Rand contribution from each one of our.
Cardholders.
The margin, obviously increases exponentially with the amount of have climbed steadily increase because the cost base and he's relatively fixed and as far as the South African business is concerned.
HM if you look at the 3 million people.
That we had they'd say roughly two years ago.
I think the the revenues that we had at that point was approximately $250 million.
And that obviously excludes case, Nate and assessment business and EBIT dollar probably in the region of $50 million.
It is on that number so roughly a margin of I've I would say 20%.
Right, that's a that's really helpful.
30, you know what what gives you confidence that without having a the SASSA contract does as kind of a distribution feeder that you'll be able to grow the account base you know from.
And over a million out to two to 3 million overtime.
It's purely our of distribution networks that we havent scaled down a as a result of of the loss of that contract and so we have retained in fact, we've grown our financial services branch infrastructure.
We have also.
The pruitt and sort of say me portable brontosaurus through the use all of bad customized containers.
And in combination with the Finbond branch infrastructure.
If we just look at physical brick and mortar branches. We are just.
Yeah, so between seven and 800 and these are mainly distributed in the rural and Sameet rural areas.
Which are in the South African context is fairly unique and gives us access to a a part of the market that few of the other a bank so our.
It's actually service yeah. The second thing I think thats quite important is that we have.
Technology that enables us to operate in these rural and deeper all areas Oh fly man that way required.
We also have the experience of having serviced.
Customer base for the last 20 years, or so which which gives us a unique advantage.
And finally, when you just look at the product state that we affects in terms of the the bank accounts the functionality and the pricing of of what we offer combine that with the financial services.
And the fact that these are specifically designed for outlet.
Target market.
We know because we do regular benchmarking that we are still by far the cheapest product sake offset to that customer base.
And so that's.
Secondly, the fact is that that provides me with the confidence that we will be able to grow back this business.
Super I appreciate the color there last one for me.
I'm doing my math right. It looks like you guys should have you know roughly $160 million are so.
If all the.
Proceeds work out to it it would deny and you keep to the I guess investment or capital allocation schedule that you've laid out how much cash do you need on the balance sheet to run the business and I guess, what I'm really asking is how much of that 160 is it's actually available for repurchases.
[noise].
I think a it's a it's a great question, obviously that Didnt 60.
It's also a factor of.
The combination I guess of the case, they then that the and I I'm proceeds.
And as you say native that investments.
As I've outlined.
Your next one historically has been a business that that is more comfortable having a net cash position and <unk>.
Safety cushion in order for us to grow specifically, the working capital side of things when it comes to and the.
Yeah, the growing up the book et cetera.
At this stage, we don't foresee any specific need a young for fall for that meaning [noise].
Ill.
Acquisitions.
Most of our businesses all Capex light and all the Capex that we required has been invested.
And so you know, we we would I think be comfortable with with a cash Massa have probably between.
$30 million to $50 million to grow any of our initiatives over time.
And.
At the same.
I'm, we obviously have to assume that weve extinguished all of the date.
That remains within the group that is not a material number but yeah. It's something that we will also be attending too so.
We've set up the the repurchase limit up to 100.
Million and I think.
As we realize these proceeds from from the various investments, which I hope it is sort of in the early part of Q4, we will be able to provide more color of the exact quantum in nature of the repurchase program.
Great I appreciate the time to you guys.
Thank you Scott.
Ladies and gentlemen, just any mine Dan if you would like to ask a question. Keith Star then one if you would like to ask a question Keith peacetime Finland.
We have a question from Gordon from Gordon Capital. Please go ahead Sir.
When we complete the bank Frick deal what do you see the prospects are.
Bank Frick.
These are and the other payments.
[laughter] was on so I think is is simply that we will then become as Nate one.
Principal members through bank Frick, all of both visa and Mastercard. So we would have anticipated excise as a principal member to both the issuing and the acquiring licenses.
Yes.
That enables us to price our products are now offerings to merchants and specifically for acquiring.
At a level, which is competitive to to those offered by our competitors.
[noise] compare that to a situation where we.
To leverage of.
Third party financial institutions way you all provided with abide rates and then you still have to mark out.
You offering from that buy rates I think for <unk> that is is one of the key add.
Important and differentiating matches. It also allows.
As to launch a all of our new technologies that we've been developing over the last two years ranging from a instant onboarding to virtual bank account issuance.
In a fully regulated environment with is the E and finally.
Oh said that the the products that we've developed on the block chain and the individual financial asset side, we will be able to offer those.
Bank that is a member of the group which is.
Widely regarded as as the leader in the in the European space within the the block trading.
Virtual financial asset space.
So back in a nutshell is is the benefits that we see the immediate benefit of completing the transaction.
And how do you see deny working out.
Yes, Hi, we weve granted the.
Option expires on the city as of March as I said.
At this point in time the proceeds.
And we granted the option to effectively to the management team of the and I.
And so they are a very well advanced in finding.
The.
Institutional investors, who are interested in acquiring our 60% stake.
At this stage the a the process I think is relatively advanced and we have no reason to believe that the option will not be completed by the city as of March.
Thank you.
We have no further questions.
Ladies and gentlemen that competes today's conference. Thank you for joining <unk> you may now disconnect your lines.